Lululemon Athletica Inc. LULU
Valuation holds this up; Optionality is the soft spot.
| Moat | 7.0 |
| Management | 6.0 |
| Valuation | 8.0 |
| Risk · 10 = lowest | 7.0 |
| Business model | 7.0 |
| Optionality | 5.0 |
The price needs 3.0% growth a year for ten years. The AI thinks 8.0% is achievable, at a 12.0% margin.
Lululemon trades at a cheap 12x forward earnings despite elite profitability (32% ROIC beats 90% of peers) and a sticky premium brand in booming wellness. Growth may slow short-term in US but China/men's expansion plus community moat support steady 8% long-term revenue gains with margins edging up on scale. Main risk: competition erodes pricing if brand cools.
lululemon athletica inc., together with its subsidiaries, designs, distributes, and retails technical athletic apparel, footwear, and accessories for women and men under the lululemon brand in the United States, Canada, Mexico, China, Hong Kong, Taiwan, Macau, Greece, and internationally. It offers pants, shorts, tops, and jackets for athletic activities, such as yoga, running, training, and other activities. The company also provides fitness-inspired accessories. It sells its products through company-operated stores; seasonal stores, pop-ups, university campus retailers, and yoga and fitness studios; outlets; Like New, a re-commerce program; and its e-commerce website. The company was founded in 1998 and is based in Vancouver, Canada.
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